Mediating Divorce from a Spendthrift Spouse

Perhaps the top issue that married couples fight about is money. Different people simply have different views on finances: some are disciplined savers, and others are free spenders. Financial incompatibility is a common reason for divorce. When one spouse works long hours to earn, while the other depletes the checking account and runs up credit card bills through wasteful spending, resentment can boil over. But if you’re divorcing a spouse because you find their spending habits intolerable, can you find common ground to settle your financial issues in mediation?

The answer is maybe. If your spouse’s spending is simply a difference in lifestyle, taste, and aspiration, there’s room for reasoned discussion. Your spouse has chosen to spend on items you find frivolous but which matter to him or her. Your spouse has made choices and should be prepared to live with the consequences of those choices. Under New York law, the consequence of dissipating the marital estate through overspending is to receive a lesser portion of the estate through equitable distribution, which divides assets in a way the court deems fair, though not necessarily equal.

Frivolous spending that does not have a valid purpose with respect to the marriage should trigger a reduction in the spender’s property award as well as their alimony. If you have clear documentation that shows wasteful spending that benefited only your spouse, not your marriage, your household or your children, you can present that evidence in mediation. Your presentation might make it quite clear that if the case went to trial, the court would find in your favor. Your spouse would still get a smaller share of the estate, but the estate itself would be reduced by the additional costs of litigation. An appeal to reason could move your spouse to a comfortable compromise position. Instead of a 50-50 split of assets, you might settle for a 60-40 division.

However, reckless spending does not generally indicate a willingness to be reasonable about finances. Spendthrift behavior often suggests a detachment from reality, an addiction, or a compulsion. If that’s the case with your spouse, you will have a hard time arriving at a mediated solution.

But mediation is still worth a try. After all, if you reach a settlement, you’ll save on legal expenses. And if you don’t manage to settle your financial issues, you can at least identify the specific expenditures you’ll have to litigate when you go to court.

If you are considering mediation for your New York divorce, Solutions Divorce Mediation, Inc. can help. Call us at 1.631.683.8172 or contact our Long Island office online.